California Supreme Court Watch

#22-263 JJD-HOV Elk Grove, LLC v. Jo-Ann Stores, LLC, S275843. (C094190; 80 Cal.App.5th 409; Sacramento County Superior Court; 34201900248163CUBCGDS.) Petition for review after the Court of Appeal affirmed the judgment in a civil action. This case presents the following issues: (1) What analytical framework should be applied in determining the enforceability of co-tenancy provisions in retail lease agreements? (2) Did the Court of Appeal correctly determine that the co-tenancy provision in this case is enforceable?

Petition for review granted: 10/12/2022

Case fully briefed: 1/30/2023

Cause argued and submitted: 10/09/2024

Opinion filed: Judgment affirmed in full: 12/19/2024

See the Court of Appeal Opinion.

See the Petition for Review.

See the Oral Argument.

See the California Supreme Court Opinion.  (JJD-HOV Elk Grove, LLC v. Jo-Ann Stores, LLC (2024) __ Cal.5th __.)

“The issue in this case is whether a cotenancy provision that allows the tenant to pay a reduced rent when a shopping center’s number of anchor tenants or occupancy level of retailers falls below a specific threshold is valid as an alternative performance of the contract or whether it is a penalty subject to [California Civil Code] section 1671’s reasonability limitation.

For the reasons discussed below, we affirm the judgment of the Court of Appeal and uphold the cotenancy provision in this case as reflecting the parties’ agreement regarding acceptable alternative performance of agreed upon contract obligations.”

Justice Evans authored the opinion of the Court, in which Chief Justice Guerrero and Justices Corrigan, Liu, Kruger, Groban, and Jenkins concurred.